Earlier on Wednesday, the US Federal Reserve had indicated that it remained on track to raise lending rates for the first time in more than seven years.

"The FOMC left the door ajar. If markets don't tighten financial conditions for them, if the US data remain firm, if global events don't scare them and if the sun shines every day, the Fed will raise rates at their December meeting," said Societe Generale in a note.

The expiry of October derivative contracts in the Futures & Options (F&O) segment also weighed on market sentiments.

"The push by Securities and Exchange Board of India (SEBI) to increase the minimum lot size from Rs 2 lakh to Rs 5 lakh led to lower market-wide rollovers, which stood at 74 percent as against the one-year average of 82 percent. With retail participation likely to drop in the F&O segment, we expect wild gyrations to continue in the next few weeks," said Amar Ambani, Head of Research at IIFL.

Among the BSE sectoral indices, Power, Bankex and Capital Goods were the top losers, while Auto and Consumer Durable indices remained supported.

Sun Pharma shares were down 2.3 percent after the company said it has started recalling a million boxes of Loratadine, an anti-allergic drug, from the US market after the tablets were found to be 'super potent' and 'out of specification'.

Hero Motocorp stock prices gained 0.2 percent on the expectations of over 20 percent growth in its sales in October due to high demand during the festive season.

Yes Bank shares closed nearly 2 percent after the bank announced a forecast beating profit growth of 26.5 percent for the second quarter in the current fiscal year.

"The bank's asset quality performance has held up well so far. Going forward, we have factored higher provisions and slippages given the bank's corporate exposure to metals and EPC. Even after factoring the higher provisions and slippages, we expect Yes Bank to deliver a CAGR of 20.2 percent in earnings for FY2015-17E. Currently, the stock trades at 1.9x FY2017E ABV. We maintain BUY rating on the stock," said Vaibhav Agrawal, Vice-President of Research- Banking at Angel Broking.

Share prices of domestic search engine Just Dial closed over 11 percent lower despite a surge in its profit by a little over 47 percent in the September quarter.

"A total of 34 stocks registered a fresh 52-week high in trades today, while 19 stocks touched a new 52-week low on the NSE," IIFL said in a note.

On the commodities front, gold prices fell sharply by Rs 190 to Rs 27,075 per 10 grams on the back of renewed expectations over increase in interest rates by the US central bank. The yellow metal prices came under pressure amid a strengthening US dollar. Silver prices rose marginally by Rs 15 to Rs 37,365 per kg.